HERCULES -- After more than two years of challenges, all the issues blocking the Sycamore North project have been resolved, clearing the way for the City Council's unanimous approval this week to sell the long-troubled property.

The property is expected to close escrow by its scheduled Friday goal date, and construction could begin in about six months when permits are secured and construction documents are completed.

The council on Tuesday formally approved the sale to Presidio Development Partners, which included an increased purchase price of $1.1 million -- a far cry from the initial $425,000 price.

The sale price was raised, in part, because of a ruling from the Department of Industrial Relations (DIR) in Sacramento. The DIR considered whether Presidio would have to pay union wages to complete the project.

According to a Hercules staff report, the DIR ruled that to be considered a non-union project, the property's purchase price needed to be at least $700,000, which the agency determined to be a fair market value. The price ballooned even more when the city added charges to recoup its actual costs, including certain legal expenses, school district fees and other costs associated with the maintenance and sale of the property, including closing costs of about $25,000.

If the DIR had required that union wages be paid, it could have added an additional $6 million to the total project cost.

Sycamore North started out as a city project but stalled in 2011 when Hercules ran out of money, with more than $35 million spent and an estimated $30 million needed to finish. The initial plan had been for 96 apartments, 74 of them affordable, over as much as 40,000 square feet of retail space.

Developer Bridge Housing submitted a proposal in 2011 to finish the project, then dubbed Sycamore North, as an all-affordable housing development. Bridge planned to restructure the loans and repay them out of income from the project. Also, the city would have shared in future cash flow from the project for 30 years or more, according to Bridge officials.

Bridge withdrew after the plans were scorned by some residents who warned of crime and falling property values, especially in the adjacent Bayside subdivision.

The current plan is for Presidio to finish the project, since renamed Town Centrale, as an upscale, market-rate apartment complex with about 140 units over 10,000 square feet of ground-floor restaurants and stores.

A second issue was an eminent domain lawsuit that the city has filed against the Bayside Homeowners Association over an alley behind the residential/commercial property that the developer needs to complete the project. The city resolved a legal dispute with the homeowners' association to acquire the alley. The cost to purchase the alley will be included in the $1.1 million purchase price.